China to relax curbs on FDI in financial sector
BEIJING: China unveiled plans on Friday to allow more foreign investment in banking, insurance, securities and credit-rating firms, as part of a wider opening up of the world’s second-largest economy.
The moves could ease some frustration among foreign firms over their lack of access, though the guidelines issued by the National Development and Reform Commission (NDRC) were short on detail.
The document issued by the state planner listed priority sectors for liberalisation but was unclear over the extent and time-frame for the reforms.
The focus on liberalising the financial sector should support China’s strategic shift towards services to reduce reliance on traditional industries for growth.
Ning Jizhe, vice chairman at NDRC, told a news conference that the government would maintain “some controls” even after easing curbs in foreign investment, but did not elaborate.
“The extent of relaxations for different areas will be different,” the official said.
Other businesses that the NDRC earmarked for opening up in the manufacturing sector included rail transportation equipment, motorcycles, edible fats and oils, and fuel ethanol.
The NDRC also said China will lift restrictions on foreign investment in unconventional oil and gas production, which usually refers to development of shale deposits.
China will also seek to open up, in an “orderly way”, sensitive areas such as telecoms, education, Internet to foreign investment, as well as relaxing foreign investment restrictions on credit-rating services, the NDRC document said.
Any further opening up to foreign firms should help redress an imbalance in investment flows, as worryingly high capital outflows have been a contributory factor behind the yuan’s depreciation to an 8-1/2 year low against the dollar this year.
While Chinese companies, from insurance to property sectors, have expanded overseas at a rapid pace, with overseas acquisitions hitting a record this year, many US and European firms remain frustrated by China’s restrictions on investment. — Reuters